CI Financial Income Fund today announced that its board of trustees has approved a proposal to convert to a corporation. The change would allow Toronto-based CI to take advantage of growth opportunities available in current market conditions, it says.

“The unprecedented situation in today’s markets has created attractive opportunities for acquisitions in the asset management business,” says Bill Holland, CEO. “A corporate structure will allow us to take full advantage of these unique circumstances and put us at the forefront of industry consolidation.”

The board and senior management of the wealth management company believe that the conversion of the fund to a corporation is in the best interests of CI and its stakeholders and will provide a number of strategic benefits.

“Conversion will position CI for continued growth and help to solidify its position as one of the dominant firms in the Canadian asset management business,” says Holland. “This proposal removes CI from the uncertainty gripping the income trust marketplace today.”

Furthermore, Holland says, a corporate structure will provide for better access to the capital markets, and make it easier for CI to explore business and strategic opportunities outside of Canada.

“The environment that supported CI’s decision to convert to a trust in 2006 no longer exists,” Holland adds. “With the impending taxation of trusts and the severe limits to growth imposed by the government, the trust structure has become disadvantageous, despite CI’s subsequent success in sales, asset growth and profitability.”

Holland explains that CI had attempted to make several acquisitions over the past year, but that these efforts were impeded by the uncertainty over the trust structure.

CI’s conversion to a corporation is subject to unitholder, court and other approvals. Unitholders will be entitled to vote on the conversion at a special meeting to be held on Dec. 19.

The conversion will be completed on a tax-free roll-over basis, CI says.

CI says the the timing for conversion is ideal as it permits it to complete fiscal 2008 as a trust and start its new fiscal year as a corporation.

CI also announced that the board of trustees has decided to adopt a dividend policy for the new corporation that will have the corporation paying quarterly cash dividends at rate of 12¢ a share. CI says this dividend rate will enable it to apply available cash resources towards acquisitions and growth.

The board has determined that there will be no distribution payable in December. However, it intends for CI to pay an additional 4¢ a share for the quarter ended Mar. 31, 2009, so that shareholders will receive 16¢ a share.

IE